Is The Baseball Card & Memorabilia Market Still Bullish?

In 1929 John D. Rockefeller decided to sell his stocks when a lowly shoe shine boy offered him tips, thus saving the family fortune during the market crash.  This story has a whiff of urban folklore, even if In recent years business writers have trotted John D. out during bubbles we’ve seen in tech stocks and in the housing market. As I reported in another post on the 2015 National Sports Collectors Convention in Chicago, auction and dealer sales are breaking one record after another. For example, if you had bought a 1952 Mickey Mantle Topps Rookie card in near mint-to mint condition last winter and sold it at the National, you would have enjoyed a $125,000 return on your investment; the card has almost doubled in value to $400,000. This wasn’t an isolated case, either. Heritage sold a 1915 Cracker Jack "Shoeless" Joe Jackson for $101,555, more than double the previous auction record for that card, according to Vintage Card Prices, in 2014.

"Whatever is current and in your face. Kim Kardashian is more important than half the presidents. " Heritage sold a 1915 Cracker Jack Joe Jackson for $101,555, more than double the previous auction record.

This sale and many others I saw in Chicago left me wondering if the industry had reached a shoe-shine boy tipping point.  Is this easy money a sign of irrational exuberance for a market about to crash or a textbook case of Adam Smith’s free-market based on supply and demand? My conclusion is that it is a bit of both and that before you liquidate your 401K to buy Babe Ruth cards, you had better weigh the long-term risks and rewards.

At Heritage’s hugely successful $5.8 million Platinum Live Auction in Chicago, I shared a dinner table with Alan Gutterman, a fellow Brooklynite who’s old enough to have attended a lot of Brooklyn Dodgers games before they moved in 1957 and wise enough to point out that my mention of Adam Smith was surely the only time the economist’s name came up at the show.  (“Who did he play for?” my Scarsdale High School history teacher Werner Feig used to say.) The speculative frenzy of buying and selling baseball cards and memorabilia made Gutterman nervous. “It’s akin to day trading or gambling,” he said. “There are more dealers trading with each other than collectors.”

I, too, noticed a lot of dealers doing brisk business among themselves, spending thousands, even tens of thousands of dollars, at each other’s booths. The activity resembled not so much a Ponzi scheme, which has sinister intent, but a game of musical chairs in which the last player is left standing when the music stops. Was it really that simple for one dealer who paid another $5500 for a ragged 1952 Mickey Mantle rookie card to flip it for $5900, as he had hoped? Before the Heritage auction, a New York dealer I know said he might bid up a 2009 Yankees World Series ring to $20,000, not because he wanted it but to protect the investment he made in his own.  No worries; it went for $23,900.

At the Champion Sports booth rented by my friends, I dealt several vintage baseball gloves at fair prices, only to discover one of them sell a few days later on eBay for substantially more.  In other words, my buyer was a dealer. Of course, I have no way of knowing if his eBay buyer was yet another dealer looking to flip. After emailing him a  photo of Tom Seaver’s 1969 World Series game-worn cap in a case at the National that sold in an Iconic auction for about $7000, a serious Mets colllector said that it has been sold and resold at least three times over the past year.  A few days later the collector sent me an email with a note “Now on eBay!!!” Sure enough the hat was on eBay with a new asking price of $9999.

As I was walking down an aisle at the start of the convention a curmudgeonly dealer launched into a bit of a tirade. “What do today’s kids know about American history?” he cried.  “Whatever is current and in your face. Lebron is the God of all sports. Kim Kardashian is more important than half the presidents. In the ‘30s and ‘40s it was Shirley Temple. In the ‘50s it was cowboys and Indians. In the ‘60s it was astronauts. How many people collect astronauts?”

In fact space exploration remains a very solid category for Heritage, the Dallas-based heavy-hitter, and other auction houses, but I see his point about the hobby’s future.  A number of dealers I spoke to stressed the need to plant the seeds for the generation following baby boomers. I saw plenty of fathers going from booth to booth, sharing their love of vintage cards with their small children. At the same time the most excited youths were in the booths of Topps and Panini, tearing open packs of “shiny new cards,” as the dealers in vintage material say, of their favorite players and valuable insets.  Perhaps they will be the next generation to feel nostalgic about sports cards. I consider myself lucky going with my Dad to some of the first vintage baseball card shows in the early 1970s when I was 12 and 13-years old.  Part of my own collecting bug is rooted in the love of baseball my father and I shared.

Another cause for concern should be that the National’s demographics mirrored neither the nation nor Chicago’s. I counted two African-American dealers out of the 600. The collectors were almost lily white, as well. (The East Coast National in suburban New York had a higher percentage but not by much.) I find this ironic because so much of the hobby rests on the hero worship of legends like Jackie Robinson and Roberto Clemente. At the National I saw signs that Michael Jordan’s rookie remains as hot as ever. Photos of Robinson and him graced the covers of two of the leadings sports card magazines.

A few dealers sounded alarms about the meteoric rise of prices.  “A 1952 Mickey Mantle Topps!” declared Rick “Diesel” Edmunds, referring to an example in fair condition going for $12,500, a relatively low price these days . “99.9 percent of people can’t afford it. Who are you gonna sell it to?”  The fun is guessing which cards, if any, will appreciate as much.  I did see dozens of early Mantle Topps and Bowmans in excellent grades and higher still sitting in their cases at the end of the show— probably because they were 30 to 40 percent above the price guides. The dealers selling those are clearly ahead of the market.

At the end of the show, I had long talk with Levi Bleam of 707 Cards, a highly regarded dealer for 35 years. He agreed with with Edmunds about the Mantle Topps rookie. “The pool is much smaller,” he said. “Now there are PSA 1s  [poor] in auctions because the 8s [Near Mint-Mint] are in collections and not going anywhere. “ Well, as noted, two just sold for big money.

“Look at the Honus Wagner [T206 tobacco card],” Bleam added.  “A piece of junk goes for mid-six figures. Remember when the Dow was at 10,000?  [Today it’s 16,000.] The economy is better and 30 to 40 year-olds with discretionary income are starting to make other investments.”

In an earlier post about the future of sports collectibles I covered the superb history of baseball cards by Dave Jamieson Mint Condition: How Baseball Cards Became an American Obsession(Grove Press, 272 pages, $15.95.) Jamieson sounded a fairly grim note about the hobby’s future. “Mostly notably missing from the National [Convention] were children. At nearly 30 years old I felt like a spry pup alongside the vast majority of collectors there, most of them appearing to have settled nicely into middle age.” In the five years since Jamieson’s book appeared, the marketed has been bullish beyond belief. Whom am I to be the baseball card world’s Cassandra?

Bleam insists that he never tells customers to buy for investment.  “Buy what you like,” he says, “If it’s quality, it will take care of itself.” As a case in point, he speculated that if they came up for sale, a mint Mantle would command $1 million and a gem mint $3 million. “People in that category who want the card are not worried about the money,” Bleam says. In other words what might be your retirement and house is pocket change for these high-rollers. But what happens if they pull out? The difference may be that they have money to burn and you don’t, so it’s best tread with caution and, yes, heed Bleam’s advice about buying what you like— one of the oldest adages about collecting. If the price falls,mit will still give you pleasure.